Note 9 - Income Taxes |
3 Months Ended |
|---|---|
Dec. 31, 2019 | |
| Notes to Financial Statements | |
| Income Tax Disclosure [Text Block] |
Note 9. Income TaxesFor the three months ended December 31, 2019, the Company recorded income tax expense of $123,000, reflecting an effective tax rate of 19.7%. For the three months ended December 31, 2018, the Company recorded an expense for income taxes of $296,000, reflecting an effective tax rate of 22.7%. Our first quarter of fiscal 2020 tax expense reflected a lower tax rate due to increased permanent differences related to research and development credits. The differences between the effective tax rate and the statutory tax rate were related to nondeductible meals and entertainment, nondeductible stock compensation, foreign derived intangibles deduction and research and development credits.Deferred taxes recognize the impact of temporary differences between the amounts of the assets and liabilities recorded for financial statement purposes and these amounts measured in accordance with tax laws. The Company’s realization of deferred tax temporary differences is contingent upon future taxable earnings. The Company reviewed its deferred tax asset for expected utilization using a “more likely than not” criteria by assessing the available positive and negative factors surrounding its recoverability.As of December 31, 2019 and September 30, 2019, the Company had a remaining valuation allowance of approximately $47,000 not expect to utilize. Based on the Company’s analysis and review of long-term forecasts and all available evidence, the Company determined that there should be no further change in the valuation allowance for the three months ended December 31, 2019.
As of d tax benefits as a component of income tax expense. The Company does December 31, 2019, we do not have any unrecognized tax benefits. It is the Company’s practice to recognize interest and penalties accrued on any unrecognizenot expect any material changes in its unrecognized tax positions over the next 12 months. |